News from Notch Consulting, Inc.

On Thursday, May 22, Korea Kumho Petrochemical Co. issued a press release responding to the announcement by Flexsys America L.P. that it has filed a new U.S. International Trade Commission complaint regarding patent infringement claims against Korea Kumho and Sinorgchem, a Chinese company.

The main text of the release is below.

“Previous complaints made by Flexsys on the same patents have been resolved in KKPC’s favor,” remarked Sung Kyu Lim, KKPC’s Senior Vice President, “It is regrettable that Flexsys has chosen to improperly sue again on patent claims it has lost, even after stipulating it would not do so, and then to issue a press release in what appears to be a desperate and illegitimate attempt to poison the market for KKPC’s products. We are confident that we will once again defeat Flexsys’ patent claims, as we have done in the past.”

In its new ITC Complaint, Flexsys re-asserts infringement of its U.S. Patent No. 5,453,541 (“‘541 patent”) and U.S. Patent No. 5,608,111 (“‘111 patent”), pertaining to processes for producing 4-ADPA and 6-PPD. With Flexsys’ agreement, the U.S. District Court for the Northern District of Ohio ordered Flexsys on November 8, 2006 to never again file a patent infringement action against KKPC involving the processes currently being used to produce KKPC’s 6PPD products. Flexsys’ new ITC action is in violation of that Court Order. On July 13, 2006, the ITC entered a Final Determination in Flexsys’ previous ITC action against KKPC that KKPC did not infringe Flexsys’ ‘111 patent. Flexsys chose not to appeal the Final Determination in favor of KKPC. On December 21, 2007, the U.S. Court of Appeals for the Federal Circuit also found that KKPC’s 4-ADPA supplier, Sinorgchem Co, Shandong, did not literally infringe Flexsys’ ‘111 patent. Flexsys’ request for a rehearing of that adverse appellate decision was denied, without comment, on April 7, 2008.

On May 21, Solutia announced that its Flexsys subsidiary plans to cease manufacturing at its factory in Ruabon, Wales, by the end of 2008, with complete exit of the site exit by the end of 2011. With this closure, Flexsys will exit the market for three product lines currently manufactured at Ruabon: Santogard PVI pre- vulcanization inhibitors; Perkacit DPG, a secondary accelerator; and Flectol TMQ and Flectol HPG, which are antioxidants (Flectol HPG is a high performance grade of TMQ).

The Ruabon Works at Wrexham is the only Flexsys plant in the United Kingdom. Within Europe, Flexsys also has rubber chemical plants (including insoluble sulfur) in Belgium, France, Italy, Netherlands and Germany; other rubber chemicals plants are located in the US, Brazil, Japan and Malaysia.

From the Flexsys press release:

“This action is part of our strategy to strengthen the profitable, market-leading positions that Flexsys holds across most of its portfolio, while taking steps to limit our exposure in smaller product lines where Flexsys is no longer cost competitive,” said Jim Voss, president of Flexsys and senior vice president of Solutia Inc.

Voss added, “Our Ruabon site makes three product lines for which the market is over-supplied due to emerging competition from Far Eastern producers. Despite the significant steps our Ruabon management and employees have taken to improve the position of the site, it is unfortunately no longer cost competitive on a global scale. We will work to ensure the employees impacted by this change are treated the right way, and that our customers have a smooth transition to a new supply arrangement.”

According to the Flintshire Standard, a local paper, the closure will cost 162 jobs. The plant has been in operation for more than a century and is one of the oldest industrial sites in North Wales, according to another local paper, the Daily Post. It was first opened in 1867 to extract oils and wax from shale. Monsanto entered into partnership with the site in 1919 to produce vanillin, salicylic acid, aspirin and later rubber. Production of rubber chemicals began at the site in 1930, according to an informative 2003 profile of the Ruabon Works at Manufacturer.

Credit to European Rubber Journal (subscription required) for the news.

According to Rubber & Plastics News (subscription required), Flexsys America LP filed a new complaint with the US International Trade Commission on May 12, 2008 regarding its ongoing patent infringement suit against Sinorgchem Co. (Shanghai, China), Korea Kumho Petrochemical Co., Ltd. (Seoul, South Korea), Kumho Tire Co., Inc. (Seoul, South Korea), and Kumho Tire USA Inc. (Rancho Cucamonga, CA).

Flexsys alleges that Sinorgchem is infringing on its patented manufacturing process for 4-ADPA, a precursor for the production of 6PPD rubber antidegradants, and that Kumho is infringing by using SInorgchem’s 4-ADPA to produce 6PPD. The new suit requests that the Commission conduct an investigation under section 337 of the Tariff Act of 1930 and seeks a permanent injunction against the sale of 6PPD and 4-ADPA produced by Sinorgchem or Kumho in the US, as well as the sale of any tires made with these chemicals.

Here is a copy of the complaint.

Here is a copy of the press release.

Flexsys also continues to pursue its patent infringement suit against Sinorgchem, Kumho and others, which was originally filed in February 2005. The case was dealt a set-back in December 2007, when the US Federal Appeals Court vacated and remanded a February 2006 decision by the US International Trade Commission that found that Sinorgchem had literally infringed on the Flexsys patents. On April 7, 2008, the Federal Circuit denied Flexsys’ request for a rehearing of the decision by the full panel of judges on the Federal Circuit. These decisions bounced the case back to the US ITC to determine whether Sinorgchem’s processes infringe on Flexsys’ patents on other grounds.

Flexsys also has a civil patent infringement suit against Sinorgchem, KKPC and Kumho TIre pending before the Cleveland federal district court, but this case cannot be decided until the ITC process has been decided.

This blog has previously covered this topic here, here, here, and here.